Airtel CEO calls for ARPUs beyond Rs300 per month

While announcing its Q3FY23 earnings, Bharti Airtel had reported 91.5% yoy increase in its net profits. The revenue increase had been equally impressive at around 20%. To a large extent, the spike in profits and the top line was driven by a spike in the average revenue per user (ARPU). Normally, the ARPU for telecom companies is measured on a monthly basis. However, despite this growth and with ARPU at Rs 193 in the December 2022 quarter on an average, the Bharti Airtel CEO, Gopal Vittal, is far from happy. 

According to Vittal, higher ARPU levels of close to Rs 300 is essential to realize justifiable returns on capital investments. The telecom companies in India like Jio and Airtel are not only investing heavily in the existing 4G networks, but have also sunk in billions of dollars into the future ready 5G networks. According to Vittal, this would be a more desirable level of ARPU, wherein Airtel can not only defray its operating costs, but also the capital costs.

It may be recollected that Airtel has already hiked tariffs on entry-level plans from Rs 99 to Rs 155 in 17 out of the 21 indigenous telecom circles. This was instrumental in weeding out the unviable customers and at the same time also resulted in improving the standards of service and ROI in most of these circles. However, Airtel is a lot more cautious about hiking tariffs as price hikes are not welcomed by long term clients. Instead, weeding out the less profitable clients is a much better proposition for Bharti Airtel. For now, any unilateral tariff hike looks unlikely considering the intense competition in telecom. 

The major priority for Airtel is to establish 5G throughout India and fund the 5G plans by tweaking its customer mix. That seems to be working for now.